The UK market is declining in afternoon trading Friday, as weak manufacturing data killed risk appetite across the region, ahead of the key U.S. employment report for May. The Asian markets closed mostly lower after China's manufacturing expansion fell more than expected in May.
World Bank Group President Robert Zoellick has called on Eurozone leaders to get ready with an emergency plan as events in Greece could trigger financial fright in Spain, Italy and across the Eurozone, pushing Europe into a danger zone.
"If Greece leaves the Eurozone, the contagion is impossible to predict, just as Lehman had unexpected consequences," the head of the global lender said in an OPED published in the Financial Times.
"A Greek exit would trigger a hit to confidence in other sovereign euro assets. Eurozone leaders need to be ready. There will not be time for meetings of Finance Ministers to discuss the outlook and debate the politics of incrementalism. In panicked markets, investors flee to safe assets, sparking other flames," he warned.
The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.51 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 1.10 percent.
The FTSE 100 index is losing 0.69 percent.
Miners retreated sharply on manufacturing data from China. BHP Billiton is falling 1.6 percent and Rio Tinto is losing around 2 percent. Fresnillo is declining 4.2 percent.
Aquarius Platinum is plunging 11.2 percent.
Oil giant BP intends to sell its shareholding in Russian joint venture TNK-BP Ltd., as it has received "unsolicited indications" from interested parties. The stock is up 2.4 percent.
Asset manager Man Group is climbing 4.7 percent. Utility Severn Trent is gaining 1.7 percent.
HMV Group is climbing nearly 16 percent. The firm announced the sale of London concert venue Hammersmith Apollo.
Elsewhere in Europe, the German DAX is declining 2.55 percent and the French CAC 40 is falling 1.42 percent. Switzerland's SMI is retreating 1.02 percent.
In economic news, final data from a survey by Markit Economics and BME showed that activity in the Germany manufacturing sector deteriorated at the sharpest pace in nearly three years in May. The seasonally adjusted purchasing managers' index for the manufacturing sector came in at 45.2 in May, slightly higher than 45 recorded in the flash estimates. In April, the reading was 46.2.
Eurozone manufacturing activity also deteriorated at the strongest pace in nearly three years in May. The seasonally adjusted purchasing managers' index fell to 45.1 in May from 45.9 in April. The latest reading was the weakest since mid-2009.
Meanwhile, the Eurozone jobless rate came in at 11 percent in April, the same rate as seen in March, Eurostat said. It also matched economists' expectations.
China's manufacturing expansion slowed in May, partly due to a substantial reduction in new orders, a survey by the China Federation of Logistics and Purchasing showed. The index fell to 50.4 in May from 53.3 in April compared to expectations for a fall to 52. The Shanghai Composite Index edged up 0.05 percent on hopes of more stimulus measures.
Slowdown in manufacturing in China rattled markets across Asia/Pacific. Japan's Nikkei 225 retreated 1.2 percent. Australia's All Ordinaries and Hong Kong's Hang Seng slid 0.4 percent each.
The U.S. futures point to a lower open on Wall Street. The monthly jobs data will likely show the economy added 150,000 jobs in May, up from 115,000 in April. The unemployment rate is seen holding steady at 8.1 percent. Besides the jobs report, the ISM manufacturing survey report due later in the day, is expected to show a moderate drop in manufacturing in May.
In the previous session, the major averages ended the day in the red but well off their worst levels of the session. The Dow edged down 0.2 percent, the Nasdaq fell 0.4 percent and the S&P 500 slipped 0.2 percent.
In the commodity space, crude for July delivery is dropping $1.65 to $84.88 per barrel and August gold is dropping $8.7 to $1555.5 a troy ounce.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis